US lawmakers plan to introduce legislation on Wednesday to extend unilateral economic sanctions against Iran and Libya for another five years, amid a growing sense in Washington that the penalties will be renewed.

US Rep. Ben Gilman, a Republican from New York, and Rep. Howard Berman, a Democrat from California, who are introducing the bill, have signed up more than 169 members of the US House of Representatives as co-sponsors, Brian Walsh, Gilman's spokesman, told Reuters.

Senate sponsors of similar legislation have 63 senators in their corner, but are waiting to reach 67, two-thirds of the Senate, before formally introducing the bill, a Senate Republican aide said.

President George W. Bush and some of his top aides came into office displaying considerable interest in modifying the growing number of legally mandated US sanctions that hamper a president's flexibility in making foreign policy and, some argue, hurt US interests.

But, as in the case of Iran and Libya, domestic US support for continued penalties against some countries makes it hard to alter the system.

The American-Israel Public Affairs Committee, or AIPAC, a leading pro-Israel lobbying organization, has waged an intensive campaign to ensure that the legislation, known formally as the Iran-Libya Sanctions Act or ILSA, will be extended.

ILSA was enacted in 1996 to discourage foreign energy firms, including those in Europe, from investing in Iran and Libya.

It gives the US president the authority to bar or reduce imports of goods from countries which invest in Iran and Libya.

ILSA expires on August 5.

Congressional aides predicted the House of Representatives would begin acting on the legislation soon after Congress returns from recess on June 6, said the agency.

Some administration officials have discussed with Congress the possibility of giving Bush maximum flexibility under the law to waive sanctions if he deems it in the US interest.

But some lawmakers have warned that if the bill is opened to modification, it could toughen penalties on Iran and Libya rather than make way for a relaxation.

While the final shape of the law is still subject to negotiation, few doubt that the sanctions will be renewed.

"There will be an ILSA," one administration official said.

Bush made clear in public comments last month that this is not the time to lift penalties on Libya and Iran outright.

A recent story in the New Yorker alleging that outgoing FBI Director Louis Freeh has evidence of Iranian involvement in the 1996 bombing of the Khobar Towers US military barracks in Saudi Arabia has stirred new antipathy toward Iran in Congress.

The bombing killed 19 servicemen.

But Iran denied the claims, saying they were “fabrications” to harm the Islamic republic.